HomeTop StoriesVisualizing The 7 Major Flaws Of The Global Financial System

February 18, 2019

Visualizing The 7 Major Flaws Of The Global Financial System

Since the invention of banking, the global financial system has become increasingly centralized.

In the modern system, central banks now control everything from interest rates to the issuance of currency, while government regulators, corporations, and intergovernmental organizations wield unparalleled influence at the top of this crucial food chain.

There is no doubt that this centralization has led to the creation of massive amounts of wealth, especially to those properly connected to the financial system. However, as Visual Capitalist’s Jeff Desjardins notes,the same centralization has also arguably contributed to many global challenges and risks we face today.

FLAWS OF THE GLOBAL FINANCIAL SYSTEM

Today’s infographic comes to us from investment app Abra, and it highlights the seven major flaws of the global financial system, ranging from the lack of basic access to financial services to growing inequality.

1. Billions of people globally remain unbanked To participate in the global financial sector, whether it is to make a digital payment or manage one’s wealth, one must have access to a bank account. However, 1.7 billion adults worldwide remain unbanked, having zero access to an account with a financial institution or a mobile money provider.

2. Global financial literacy remains low For people to successfully use financial services and markets, they must have some degree of financial literacy. According to a recent global survey, just 1-in-3 people show an understanding of basic financial concepts, with most of these people living in high income economies.

Without an understanding of key concepts in finance, it makes it difficult for the majority of the population to make the right decisions – and to build wealth.

3. High intermediary costs and slow transactions Once a person has access to financial services, sending and storing money should be inexpensive and fast.

However, just the opposite is true. Around the globe, the average cost of a remittance is 7.01% in fees per transaction – and when using banks, that rises to 10.53%. Even worse, these transactions can take days at a time, which seems quite unnecessary in today’s digital era.

4. Low trust in financial institutions and governments The financial sector is the least trusted business sector globally, with only a 57% level of trust according to Edelman. Meanwhile, trust in governments is even lower, with only 40% trusting the U.S. government, and the global country average sitting at 47%.

5. Rising global inequality In a centralized system, financial markets tend to be dominated by those who are best connected to them.

These are people who have:

Access to many financial opportunities and asset classes

Capital to deploy

Informational advantages

Access to financial expertise

In fact, according to recent data on global wealth concentration, the top 1% own 47% of all household wealth, while the top 10% hold roughly 85%.

On the other end of the spectrum, the vast majority of people have little to no financial assets to even start building wealth. Not only are many people living paycheck to paycheck – but they also don’t have access to assets that can create wealth, like stocks, bonds, mutual funds, or ETFs.

6. Currency manipulation and censorship In a centralized system, countries have the power to manipulate and devalue fiat currencies, and this can have a devastating effect on markets and the lives of citizens.

In Venezuela, for example, the government has continually devalued its currency, creating runaway hyperinflation as a result. The last major currency manipulation in 2018 increased the price of a cup of coffee by over 772,400% in six months.

Further, centralized power also gives governments and financial institutions the ability to financially censor citizens, by taking actions such as freezing accounts, denying access to payment systems, removing funds from accounts, and denying the retrieval of funds during bank runs.

7. The build-up of systemic risk Finally, centralization creates one final and important drawback.

With financial power concentrated with just a select few institutions, such as central banks and “too big too fail” companies, it means that one abject failure can decimate an entire system.

This happened in 2008 as U.S. subprime mortgages turned out to be an Achilles Heel for bank balance sheets, creating a ripple effect throughout the globe. Centralization means all eggs in one basket – and if that basket breaks it can possibly lead to the destruction of wealth on a large scale.

THE FUTURE OF THE GLOBAL FINANCIAL SYSTEM?

The risks and drawbacks of centralization to the global financial system are well known, however there has never been much of a real alternative – until now.

With the proliferation of mobile phones and internet access, as well as the development of decentralization technologies like the blockchain, it may be possible to build an entirely new financial system.

If you like small government……

Political correctness is….

You have the right to protect your health & home. Whether it’s unsafe technology, mandatory vaccines, or other unwanted interventions, InPower can help you reclaim your authority with the use of our commercial administrative process that anyone can use:

If you think it’s a good idea to……

The Kuhner Report – Podcasts:

Isn’t there a better way to vote?

by Witsnews

Voter fraud is on the rise, the same politicians keep getting elected over & over & over again….and we wonder why nothing ever gets done in Washington. One has to wonder how much of an influence voter fraud and the illegal vote has had on our current political state in this country.

Isn’t it time to change the way we vote, so that our votes actually count, instead of being effectively nullified by voter fraud?

Here are a few suggestions:

Every state should start requiring photo ID and proof of citizenship from every voter. (no-brainer)

Hand stamping procedures or similar tools for verifying one vote per person should be implemented in all states.

Early voting by mail, and absentee voting should be strictly limited to only those cases where legitimate need is proven. “Ballot harvesting”, a favorite among Democrats in California which allows anyone to collect absentee ballots unsupervised, should be outlawed.

Voting machines:

Any state using electronic voting machines should require that the machines provide multiple copy paper receipts showing a date/time stamp, voting location, machine ID number, and list all the candidate choices the voter selected.

One copy remains with the voter who initials all the receipts to verify that the information on the receipts is correct, and one copy goes to a representative of each political party.

After the electronic votes are all tabulated, staff from each political party represented in the election proceed to hand count each and every voter receipt while being monitored by reps from each of the parties. The totals from the hand counts are then compared to the results of the machine tabulations, and all results are immediately released to the public.

If the winners from the machine tabulations match those found from the hand counts from all political parties, then an official winner is declared.

If there is a discrepancy from the hand counts of any of the political parties large enough to show a different winner than what the electronic tabulations showed, then an equal number of staff from all parties represented must combine to do an additional final manual re-count.

The results of this final count determine the official winner. If the electronic tabulations are overruled by the results of the hand counts, all voting machines involved in the process are repaired or replaced immediately.

This is just a short list. There are many other options which should be considered such as increased use of security cameras, volunteer programs to provide proper oversight, legal aid for filing fraud reports, etc.

The future of the republic is at stake here, we have to get this right…and soon.

Socialism is….

When the Muslims Came….

Before:

and After:

When the Muslim refugees came, I didn’t protest….they were just poor refugees.

When they built mosques and Islamic cultural centers, I didn’t protest….they had the right to pray to Allah.

When they demanded only Halal food in schools, I didn’t protest….they can only eat what the Koran allows them to eat.

When they gang-raped women and girls, I didn’t protest…..rapes occur in every culture, and they have nothing to do with Islam.

When they carried out terror attacks, I didn’t protest….it was only a few extremists, who didn’t represent true Islam.

When they demanded Sharia Law zones, I didn’t protest….they needed their own space, and we live in a free country.

When they took their seats in government, I didn’t protest…..they have a right to be represented.

When they introduced Islamic Sharia Law, demanding that it apply to the entire population…….it was too late for me to protest.

The duty of a true Patriot….

Meet the U.S. Congress….

Feminists say….

Do you really want to know?

Worth The Short Read:

“America, The Last Man Standing”

JFK’s Words of Wisdom

Lutheran Minister Richard Wurmbrand On The Threat To Freedom

Russian Novelist And Historian Alexander Solzhenitsyn Cautioned The U.S.

Theodore Roosevelt’s Thoughts On Civilization, America, & The Future

It’s been over seven years. Do you realize that 300 tons of radioactive water from Fukushima is still being pumped into the Pacific Ocean every day? The ocean is dying. Why hasn’t there been more of an international effort to help Japan contain this disaster?

FARMLANDS – Documentary About The Plight Of South African Farmers – by Lauren Southern

Bill Cooper 9/11 Broadcast As It Happened – Maybe The Only Real Truth That Was Heard That Day:

Still believe that two aluminum planes took down three steel skyscrapers in perfect demolition-style free fall, and turned the buildings and their contents into dust…without the assistance of some other type of destructive force? – Where Did The Towers Go? – by Dr. Judy Wood – Hardcover

Follow WITSNEWS On Twitter

In case you were wondering what your country might be like without 2nd Amendment rights, just look at history. Support the NRA – https://home.nra.org/

Slavery, Terrorism & Islam – by Dr. Peter Hammond – Paperback

Western Civilization is
under a full frontal
assault, and the leftists
are the ones holding
the door wide open to
their own demise!

Islam is not a religion,
nor is it a cult. Islam
has religious, legal,
political, economic and
military components.

Islamization occurs when
there are sufficient Muslims
in a country to agitate for
their so-called “religious rights”.

When politically correct and
culturally diverse societies
agree to “reasonable” Muslim
demands for their “religious
rights”, they also get
the other components under
the table.

Here’s how it works:

As long as the Muslim
population remains around 1%
of any given country, they
will be regarded as a
peace-loving minority and
not as a threat to anyone.
In fact, they may be
featured in articles and
films, and stereotyped for
their colorful uniqueness:

From 5% on, they exercise
an inordinate influence in
proportion to their percentage
of the population. They
will push for the introduction
of halal (clean by Islamic
standards) food, thereby
securing food preparation jobs
for Muslims. They will increase pressure on supermarket chains to feature it on their shelves…along with threats for failure to comply:

At this point, they will work
to get the ruling government
to allow them to rule
themselves under Sharia, the
Islamic Law. The ultimate
goal of Islam is to convert
the world, and to establish
Sharia law over the entire
Earth.

When Muslims reach 10%
of the population, they
will increase lawlessness
as a means of complaint
about their conditions. Any
non-Muslim action that
offends Islam will result
in uprisings and threats: